Crime - Sacto 911

Sacramento-area plaintiffs target title company, loan brokerage in fraud lawsuit

Now that three men have been sent to prison for a Ponzi scheme that cost investors more than $20 million, a half dozen of their victims are trying to get their money back in a civil suit filed against businesses the plaintiffs say aided the thieves.

The trial got underway Tuesday in Sacramento Superior Court with plaintiff lawyers charging that officials in Stewart Title of Placer and the dissolved Rocklin-based Stone Canyon Mortgage Co. played knowing roles in a fraud that left this group of victims nearly destitute.

“None of these investments would have happened,” plaintiffs’ lawyer Jack V. Valinoti told the jury in his opening statement, without loan brokers and escrow officers working in concert with the convicted Christopher Jackson, 46, and Michael Bolden, 60, among others.

Defense attorneys countered that the six plaintiffs in the civil suit taking place in front of Judge Steven H. Rodda sauntered toward financial doom with “their eyes wide open.” The only thing the title company and mortgage brokerage figures did, the defense lawyers said, was exactly what the plaintiffs wanted them to do.

“They took that money out of their pockets and gave it to Jackson and Bolden because they thought Jackson and Bolden would make them rich,” Stewart Title attorney Carl J. Calnero said in his opening statement.

U.S. District Court Judge Troy L. Nunley on Sept. 13 sentenced Jackson to 30 years in prison and Bolden to 20 years. A third defendant, Victor Alvarado, 53, who is not named in the civil action, received a 10-year term. According to the judge’s accounting, scores of people lost a total of more than $20 million by refinancing their homes and pulling money out of other investments and putting it with Jackson and the others.

After Nunley imposed the terms on Jackson, Bolden and Alvarado a week ago Friday at the federal courthouse at Fifth and I streets, Rodda just three days later empaneled the jury at the county courthouse on Ninth and H streets to hear the civil case. The principal target is Stewart Title, and the number of defendants runs well into the double digits.

The plaintiffs are Darlyne Andrus; her daughter, Wendy Proskine and son-in-law Daniel Proskine; her sister Jennifer Ruiz and brother-in-law Ernest Ruiz; and another woman named Darlene Record. Andrus lost a $620,000 Orangevale home she co-owned with the Proskines, the lawsuit charges. The Ruizes lost a 20-acre spread in Wilton worth $1.3 million. Record used to live in a $380,000 home in the Valley Hi area until she said she had to offer it for a short sale in the face of foreclosure brought on by the Jackson scheme, her lawyers said.

According to court papers, the six were enticed into a real estate investment program that Jackson and his assorted companies and partners convinced them would make them all wealthy, but one that went bust when the housing bubble popped in 2007.

The plaintiffs say Rachel Siders, a former escrow officer for Stewart Title, played a key role in the swindle in her handling of the paperwork on their refinancing loans and other transactions. Siders since has been indicted in a federal mortgage-fraud case unrelated to the Jackson scheme and is scheduled for trial on Jan. 12.

Named as a defendant in the civil case, Siders defaulted from the action by not filing an answer. She is now believed to be living out of state, according to the plaintiffs’ court papers. She could not be reached for comment.

In his opening statement, Valinoti, the plaintiffs’ attorney, said Siders worked closely with Brett Adair, a loan broker who owned Stone Canyon Mortgage, and that the two of them had a close relationship with Christopher Jackson.

The plaintiffs’ court papers did not identify the specific acts performed by Siders and Adair, but said that defendants forged signatures, fraudulently prepared and represented purchase agreements, ordered a title report without authorization, submitted false loan applications, made false representations to lenders and improperly received fees. Officials at Stewart Title, the lawsuit charges, “failed to adequately supervise their employee and escrow officer Ms. Siders.”

Calnero, the attorney for Stewart Title, blamed the ill winds of the economic downtown of the past decade and the criminal proclivities of Jackson and Bolden for the financial ravaging of the plaintiffs.

He said Siders was “let go” from Stewart Title in 2007 for lack of business. In all the transactions, he said, Siders did her job in assisting the plaintiffs, who were eager to invest their money in Jackson’s program. In court papers, Calnero wrote that the plaintiffs’ case “relies on unjustified assumptions, speculations and an attempt to character assassinate Ms. Siders.”

In a declaration filed in February, Brett Adair, who is attending the trial, said he never consulted or advised any of the plaintiffs in their transactions or promised them “that their investments were secure.”

“I never made any representations to plaintiffs that anyone’s representations were honest, reliable or true, nor made any statements about any person’s record,” Adair said in the declaration.

One of the plaintiffs, in her testimony on Wednesday and Thursday, said her sister introduced her to Jackson in October 2006 and that she was immediately taken by the appearances of the principals in the investment program, their fast cars and flashy clothes. Darlene Record said Jackson promised her a 30 percent return on her $100,000 investment in three years. He later got her to put in another $25,000 with a promise to double it in a year, Record testified.

When it came time in December 2006 to sign the papers on the refinancing of her home, Record said both Siders and Adair were on hand at Jackson’s office on Del Paso Road. Siders, Record said, “was there to instill confidence.” She said she learned later that Stone Canyon, meanwhile, had obtained a credit report on her even though she had never authorized it.

Record testified she was promised a 4.5 percent interest rate on her refinancing loan but later found out it actually was 7.5 percent. She said she told Adair she would have problems with the increase in her house payment from $900 to $1,326 a month brought on by the refinancing.

“He told me I’d be making so much money on the investment project that I wouldn’t notice,” Record testified.

On cross-examination, Record said she knew she was getting into a variable-rate loan. While loan documents showed it could have gone up as high as 12.5 percent, nobody told her, Record testified.

She also conceded that she pocketed $42,000 on the refinance after putting $100,000 in with Jackson. She said Adair told her to sign for the loan, that “they wanted me to sign quickly so we could put the loan through on the same day.”

The trial is expected to last at least two weeks.

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